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Who should bear the burden of austerity?

What does it mean to be One Nation? In an age of austerity, what does it mean to say “We are all in this together?” To what extent should Government protect the poorest and weakest from further cuts to benefits? Iain Duncan Smith’s shock resignation from the Government last week has put these questions into sharp relief.

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For millions struggling to make ends meet, these are not abstract questions, but translate into the pressing daily challenges: How can I stretch the household budget to feed myself and my children till the Child Benefit comes in; which bill to I put off paying this week; how can I possibly cope if my disability benefits are cut again?

Tens of thousands of children in the UK are currently experiencing the damaging impact of poverty. Teachers have reported children living in ‘Victorian conditions’, arriving at school hungry, tired and without warm clothing (such a winter coat or even socks), and their families having to depend on food banks. Food poverty not only leaves children hungry, it also has detrimental effects on their health and development and their ability to learn at school. Poorer children gain fewer qualifications than their richer classmates, they suffer more illness, get lower-paid jobs and have a shorter life expectancy.

As Cardinal Vincent Nichols said before the last General Election: “I’ve commented before on what I believe to be some of the unintended consequences of social welfare reform we see. I repeat; it’s shocking that in a society that is as rich as our there are people, even people in employment, dependant on food banks and hand-outs.”

In this context, how do we make sense of Iain Duncan Smith’s dramatic resignation as Secretary of State for Work and Pensions last weekend, and the wider debate about the direction of Government policy that has been sparked as a result?

Duncan Smith, a practicing Catholic, with a strong commitment to social justice, had never been far from controversy in the manner in which he had overseen huge cuts to the welfare budget, and major reforms to disability and other working age benefits. But even for him, the latest round of cuts to disability benefits were the straw that broke the camel’s back.

In his own words, the manner in which the cuts to disability benefits were presented in the Budget was “deeply unfair”, because of the way they were juxtaposed with tax cuts for the wealthy. “Given the continuing deficit, [the cuts to benefits for the disabled] are not defensible in the way they were placed within a Budget that benefits higher earning taxpayers.” Most cuttingly of all, he warned that the government is in “danger of drifting in a direction that divides society rather than unites it.”

In a context in which the Trussell Trust alone handed out more than a million food parcels last year, can it be right that the £4 billion cuts to benefits for disabled people are simply replaced by equivalent cuts elsewhere in working age benefits?

As Iain Duncan Smith’s comments allude to, in the very same budget that a further £4 billion cut in disability benefits were announced, the Chancellor also revealed £4 billion of tax cuts for higher earners, and to those wealthy enough to benefit from cuts to Capital Gains tax. According to the Daily Mail “this was the biggest giveaway to 40p taxpayers since the rate’s introduction nearly 30 years ago.”

The higher rate tax cut is not only extraordinary in its size – worth £500 a year for every higher rate taxpayer – but is part of a commitment to raise the threshold to £50,000 by the end of the parliament, which would amount to a further £1,000 handout to each higher rate taxpayer. Whilst this has been presented as a tax cut for the “squeezed middle”, the Resolution Foundation has shown that the increase in the higher-rate tax threshold will benefit the wealthiest 15 per cent of earners. In the light of recent events, is it now time for this commitment to be scrapped?

In a second tax giveaway to the relatively wealthy, from April 2016, the higher rate of Capital Gains Tax will be cut from 28% to 20% and the basic rate from 18% to 10%. This will only benefit those wealthy enough to make more than a £11,000 profit from the sale of stocks and shares or other assets, at an estimated cost of more than £600m a year from 2017-18 onwards.

The Government’s commitment to One Nation policies is welcome, but to be credible, it must be matched by policies which unite the nation rather than dividing it still further. Whether the appointment of Stephen Crabb – another Catholic MP – to the post of Work and Pension Secretary will mark the start of a different course for Government on welfare policies, only time will tell.

One can only hope that Mr Crabb heeds the words of Pope Francis: “Working for a just distribution of the fruits of the earth and human labour is not mere philanthropy. It is a moral obligation. For Christians, the responsibility is even greater: it is a commandment.”

One thought on “Who should bear the burden of austerity?”

I was too late to email my MP but write to him regularly about this. Keep up the good work prick every conscience in the nation. The nation’s check on rampant Conservative unfairness has begun Thank you